The twist here is that it wasn't his idea. The fans came to him and made it clear they wanted to fund the project. If you are a fan of Smith (as I am), you know he's been talking about various projects he's been thinking about, and last year talked a lot about a rather different kind of movie, a "political horror film" called Red State. Of course, that's definitely a big step away from Smith's usual comic-fare, and finding financing for it was initially proving difficult. But, the fans stepped up:

"I think an interesting thing that may happen with it is--I was on Twitter and people are asking about Red State, and then a dude tweeted 'hey man, what if we pay for it?' And all of a sudden, a bunch of people were like 'Seriously, why not?'"

Smith has said that if he does this, he'd match every dollar donated. They're working on a website for it, but there have been some logistical issues:

"We're kind of creating this website. We're seeing if it works to set up and collect donations. It becomes a weird tax nightmare, though... It sounded like such an easy thing online... but now there's lots of checks and balances to make sure we can do it, but if that's the case, I would be into it, and I'll match it. Whatever you raise on line, like fuck it, you put it up, I'll put it up."

Of course, doing it from scratch may raise some issues, and I'd imagine he'd be better off if he weren't trying to sell "shares" in the film, since that's where things get really tricky, but focusing on selling something else (credit in the film, access to screenings, meet & greet with Kevin, etc.), with the proceeds going to fund the film. But there are lots of platforms like Kickstarter or Biracy that he might want to look into, since they've worked out a lot of the legal issues.

Still, it highlights, yet again, what a lie it is to claim that "fans just want everything for free." And it shows that content not yet created is a scarcity people will pay for. It's still early (and Smith is focused on another movie first), but it could be one of the most high profile movies made using this technique.

But the further this moves along, the more interesting it gets. After a bunch of people misinterpreted the original interview Smith gave, he wrote out a more detailed explanation of his thinking, which is clearly still in the very initial planning stage (i.e., they don't even know if it's possible), but it looks to be about more than just fan funding this one film:

Our plan is to put anything we make into a fund that would, in turn, finance other (cost-sensible) flicks fans want to see. And from that? Build a People's Studio. Simply have any interested/frustrated/desperate party put their script on our website, open for all to read, during a "pilot season" of sorts. Script that gets the most votes, gets the loot. That flick gets made and sold, all the loot goes back into fund for next round. If there's enough loot from RED STATE sale to do so, idea would be to fund two low budget flicks a year. Ultimate dream: Indie Movement, v.3.

Even though a lot of the talk around these parts has been about music industry business models, in the last year or so, I've really been amazed at the number of indie filmmakers who have been really digging in on new business models, with a strong willingness to experiment and adapt. It's very encouraging to see.

I'd definitely donate if this were to happen. Red State is a very interesting project, and Smith already gives fans a lot of content for nothing anyway (e.g. his excellent SModcast, which despite being given away for free was recently transcribed into a book). It would be nice to have the opportunity to help him get something made in return.

It's been funny following his blog and Twitter posts on the subject, however, and it sounds like it might not happen - though I'm trying to be optimistic. Anything to get him out of the clutches of the often clueless Weinsteins would be nice, and this model really isn't *that* unusual. Many movies have been financed on private donations from doctors, dentists and friends, this just extrapolates it so that complete strangers can donate should they wish....

Kevin Smith has always been about dealing directly with his fans, since long before the internet really mattered. He started out financing his own movies, so none of this will really come as surprise. He friend financed Clerks for release in 1994.

Even you can see where he stands in 2002's "An Evening with Kevin Smith" (with the memorable quote "When we called up the student activities board, we said we were gonna be shooting at Kent State - they were like, "Bull shit!" They were like, "We went through that shit once before; never again!" "). You can see already that he has long since cultivated a cult following for his movies, which is a good thing because his movies are often a little too far off of normal to attract a mainstream audience.

He is an excellent speaker and a very good spokesman for his ideas and ideals, and appears to have found a solid niche just to the side of Hollywood, getting their support as needed but never really ending up squashed in the machine.

He does have some interesting points in here, most importantly that it takes money to make a movie, and that movie needs to make enough money to pay for the next one, or you have to re-prime the pump. So there is no chance that there will be much in the way of "free to the internet" or "pay what you like", as they will need to make the money to keep the game going.

It's just sort of like a normal studio, except using stranger's money instead of a few richer people's bucks.

why does amovie have to make money

the fans and you paid for it UNLESS your going to set it up so that the fans get a return on the donation in which case its no longer by law a donation.

YEA see you pay for the hammer it doesn't matter if you use it to make money or not YOU WILL NOW always have the hammer.
ONLY RIGHT wing capitalists think the opposite way that to make something else i have to make money on this.

ALSO if the movie is paid for it cannot NOT make money?
WHAT do you mean hes trying to use donations for more then one movie? NO not how it should work.

Others too

After all it's better that 1% of an audience pay the artist 100%, than 100% of the audience pay the artist 1% (with 99% going to a publisher). The thing is, the publisher is no longer needed because distribution, promotion, and reproduction are free.

and you could go a step furthar in local distribution

get one of those fans authorized ot make the dvdrs and he and you can get a cut. A SMALL ONE and if the movie cost more then 2$ after fans paid for it ( 1$ for the dvdr in canada and then 20 cents to the ripper and 80cents back to directors peeps....
you get the idea.

Red State?

Re: BOY is this director smart

Off Topic but I thought I'd point out that two truly "open source" movies have already been created, supported by the Blender Foundation: Elephant's Dream (http://www.elephantsdream.org/) and Big Buck Bunny (http://www.bigbuckbunny.org/)

Re: more drivel from the f-ing idiot TAM

"He does have some interesting points in here, most importantly that it takes money to make a movie, and that movie needs to make enough money to pay for the next one, or you have to re-prime the pump. So there is no chance that there will be much in the way of "free to the internet" or "pay what you like", as they will need to make the money to keep the game going."

oh yes! Because MOVIE THEATERS DONT EXIST. Avatar DID NOT MAKE 600+ million dollars, even though it was WIDELY available "for free."

Sigh - "Crowd Funding" sheesh!

Lovely story, and I wish the chap well, but for goodness sake the addition of the buzz word "crowd" is a bit pathetic. Many films, albums and projects have been funded by public subscription - I was proud to be an investor in a friend's band in the 1990's.

An IPO is an exercise in "crowd funding" only to call it that would be a tad pathetic

Crowd Funding is an excellent idea

Some of the smartest musicians are offering either crowdfunding or freemium choices for fans. Prog rock band Marillion basically came back from the dead when they asked their fans to pre-order their 2001 album before a note was written.

I'd totally buy into this. I would assume that fans offer far more constructive criticism than film investors. But I'm sure Smith already knows that.

devil in details

I dont know if this will really work, but I am also a fan of smiths so count me in. Seems like it will be a fun ride one way or the other. I think he is in a unique position to make something like this work (becuase of his brand and the sort of friend/fan he attracts), but it also seems potentially very complicated and I can also see "other offers" (aka making a living) becoming an obstical.

Re: Re: BOY is this director smart

Re: Imagine that...

We do, DCX2. It's called IndieGoGo. Any artist, filmmaker, developer or creative entrpreneur can post their project on IndieGoGo and use the tools IndieGoGo provides to cultivate their audiences and raise money from fans by selling perks (like copies of the end product or experiences). It's empowering... the people who want the end product pay to get it made.

Re: Re: Re: more drivel from the f-ing idiot TAM

"You don't realize I was saying that things will have to play in theaters to make money, and will likely have to be sold on DVD and rights managed and distributed to PPV to make money? as I said:

"there is no chance that there will be much in the way of "free to the internet" or "pay what you like", as they will need to make the money to keep the game going."

You are really going to have to STOP relying on "but you didnt get my REAL point" in EVERY rebuttal to your statements. You look like a child trying to argue childish points, then changing the argument when it doesnt go his way and then blaming everyone BUT himself for not "getting it." Take some responsibility for the content of your postings, its not EVERYONE ELSE's FAULT for not "getting" you, when you post so poorly.

NOTHING IN YOUR STATEMENT SAID SHIT ABOUT THEATERS. You said NOTHING about WHAT mechanisms would make such a project money. It was ONLY yet another rant about how using "free" CANT WORK. It was ONLY another way to take another shot at the views of people here, and an attempt to undermine ANY effort that results in anyone OTHER than Big Media making movies the way they always have been. Your poorly thought out and worded statement reads more like "but they CANT MAKE MONEY doing it this way! Free and crowdsourcing WONT WORK!"

"That means actually having to retail it, either in theaters or via DVD or paid digital download."

then SAY that next time, instead of just ranting about how "free will destroy movies" and is impossible to INCLUDE in the method.

More benefits to crowdfunding than just $$

>> I think Kevin's matching idea and creating a film idea are great and definitely worth exploring.
A crowdfunding effort would not just show there's demand for RED STATE and other projects, but it opens up the filmmaking and film funding process and lets fans participate (not just be passive viewers, which is all fans can really do now).
See: 5 Benefits of Crowdfunding for details: http://www.indiegogo.com/blog/2010/01/benefits-of-crowdfunding.html

>> I encourage Kevin to think even bigger than donations.
By pre-selling the film (for example: by pre-selling copies of the DVD) to his fans, he's not just raising $, he's giving fans something of real value - his film! (He's just doing it earlier than normal). So it's not just a donation. TechDirt is a good example of all the tangible perks one can offer with emotional, custom, financial, and scarcity incentives: http://www.techdirt.com/rtb.php

>> I hope Kevin stops spending time and money on a website and uses a platform that already exists so that he can focus on making his movie and engaging his fans, which is what I think he prefers doing anyhow.
On IndieGoGo he can:
> keep, match and recognize all the funds he raises (no all or nothing restraint)
> offer both perks and tax deductions - so no headaches around tax receipt management as he alludes to in his post. (IndieGoGo integrates fiscal sponsorship with crowdfunding via its partnership with the San Francisco Film Societ - http://www.indiegogo.com/blog/2009/09/indiegogo-and-san-francisco-film-society-strike-new-fiscal-spo nsorship-partnership.html)
> raise money along side thousands of projects from over 90 countries... i.e. be part of and help fuel the Indie Movement, v3 as he says :)

Biracy has a great model too... leveraging a referral based system to turn fans into funders too.

But the cool think about crowdfunding is that it's complementary to all other kinds of finance (it's not replacing anything if one doesn't want it to).

Crowdfunding is an exciting movement... only in its infancy. I hope Kevin jumps on board! So much more cool stuff to come.

If there is ANY Revenue Split, ownership share etc...it is ILLEGAL

It would be considered a PUBLIC offering and would have to go through a registration process, hence killing the whole thing. It must be 100% donations to avoid this trap, and it is one mean tar baby trap. This is not original and has been attempted over and over and over to be shot down by the SEC and every state regulator out there.

Re: Re: Re: more drivel from the f-ing idiot TAM

"there is no chance that there will be much in the way of "free to the internet" or "pay what you like", as they will need to make the money to keep the game going."

You're only going to be happy the day someone manages to make people pay for the stuff they don't like or have no intention of watching. Apparently we (the public) are some sort of charity that needs to keep filmmakers alive and rich.

Re: Re: Re: Re: more drivel from the f-ing idiot TAM

When you stop understanding my posts, and stop trying to put words into my mouth, I will stop claiming that you misunderstand.

As long as you continue to be an arrogant moron, I will have to keep correcting you.

NOTHING IN YOUR STATEMENT SAID SHIT ABOUT THEATERS

Exactly. You added to my words and made it sound like I said something that I did not. Your words, not mine. See? When you do that, you put words in my mouth, get them wrong, and make yourself look like an asshole while doing it.

Re: Re: Re: Re: Re: more drivel from the f-ing idiot TAM

"When you stop understanding my posts, and stop trying to put words into my mouth, I will stop claiming that you misunderstand.

As long as you continue to be an arrogant moron, I will have to keep correcting you.

NOTHING IN YOUR STATEMENT SAID SHIT ABOUT THEATERS

Exactly. You added to my words and made it sound like I said something that I did not. Your words, not mine. See? When you do that, you put words in my mouth, get them wrong, and make yourself look like an asshole while doing it.

Perhaps you should just stop now."

Wait...what? You just said two CONTRADICTORY things, then blamed ME for putting words in YOUR MOUTH??

Lets review:

YOUR comment:

"So there is no chance that there will be much in the way of "free to the internet" or "pay what you like", as they will need to make the money to keep the game going." (NOTE: no mention of movie theater as a means of recouping investment, a means that DOES NOT impact "free"/sharing at all, since its a UNIQUE experience that a free download cant replicate (this being rather the ENTIRE POINT of this tedious argument with you.) Just a slam on anything that might involve using FREE in any way.)

To which I replied:

"oh yes! Because MOVIE THEATERS DONT EXIST. Avatar DID NOT MAKE 600+ million dollars, even though it was WIDELY available "for free." (since, again, YOU DID NOT USE THEATERS AS A MECHANISM FOR RECOUPING COSTS).

To which YOU replied, essentially, "be a mind reader":

"You don't realize I was saying that things will have to play in theaters to make money, and will likely have to be sold on DVD and rights managed and distributed to PPV to make money?" (yes, maybe I didnt "realize" that you "meant" this, but also, YOU DIDNT FUCKING SAY IT, and all you did was rant about how "free" wont work, so naturally, what are we left with to go on about what your point of view on the matter is?)

Except....you then turn right around and admit that you DID mean to include theaters, after the fact, in absentia (that means, it wasnt there to begin with) and then try to "get me" by pointing out that since I didnt read your mind, and took your statments at face value, and adding in what we know about your attitude toward anything "free", that I was "putting words" in your mouth (or mistaking your meaning, which is what I think you meant). Except I didnt, because you didnt, so its not.

Re: Red State?

Re: "If there is ANY Revenue Split, ownership share etc...it is ILLEGAL." But there are other online legal models too in addition to donations..

Hey "Who Cares",
Yep, you're totally right. You can't offer profit participation / ownership stake in the film on the internet without proper disclosure documentation. That would violate U.S. SEC laws.

However you can pre-sell perks or experiences related to the film (like the DVD or a trip to the set). Imagine funding the making of a film by pre-selling thousands of copies of the DVD. (Acutally don't imagine, it's happening now on indiegogo). The only difference between "fundraising" and "distribution" then becomes the timing of the sale. It's a cool way for fans to lock in that copy (especially if it's a limited edition with limited availability) and help get the film made at the same time. Win-Win!

You can also offer tax deductions as you said by raising donation money too if you're fiscally sponsored or incorporated as a 501c-3.

So yes, there's multiple ways to raise funds from fans on the internet... none of them involve "investing" though... at least not yet :)

Re: Re: Re: Re: Re: Re: more drivel from the f-ing idiot TAM

All I can say RD is that you missed it entirely, as you always do, and your rants are frigging hilarious. I can just picture you jumping up and down and throwing things, spitting on your screen as you type.

Re: Re: Re: Re: Re: Re: Re: more drivel from the f-ing idiot TAM

"All I can say RD is that you missed it entirely, as you always do, and your rants are frigging hilarious. I can just picture you jumping up and down and throwing things, spitting on your screen as you type.

You are a classic."

Thats it? Thats all you got? "you are a classic?" So, basically, you dont REALLY have anything to say, you just troll, shill, bait, and when someone raises points to refute you, you resort to name calling, completely avoiding answering or defending the point, BUT do take the time to comment on how the person refuting you must look when they are typing their reply. Um...ok. I guess thats your call, but it seems pretty ineffectual and makes you look like you and your arguments cant stand any scrutiny.

It's weird that TechDirt hasn't picked up Artemis yet. Although they're at different points in their careers and they make different films (JSto is scifi-fantasy) I'm a fan of both Jess and Kevin and it will be cool to see different filmmakers techniques for, as JSto put it last year "building new infrastructure". I think they're both in unique positions. She also has a lot to say about strategy and why those film portal sites you mention aren't ideal. The great thing is that we can support as many movies and directors as interest us so it's not like there's a limit or a competition. Just some food for thought.

Re: Re: Re: Re: Re: Re: Re: Re: more drivel from the f-ing idiot TAM

RD, it doesn't matter what I post, because you don't read it. You add words, sentences, and ideas, and claim they are mine, but they are not. I can tell you the same thing 10 times, and you choose to ignore it.

You are a classic.

If you cannot have a discussion without making stuff up about me, why should I discuss anything with you?

an overview for those who are still unsure (including Kevin Smith)

crowdfunding general overview

There is a lot of discussion beginning to start out there with regard to what crowdfunding and crowdsourcing is and whether or not it is a legal and valuable tool to entreprenuers. its seems like there are specific groups trying to claim the term to fit within their industry subset, and for the most part (in my opinion) most of these opinions are wrong.

not investing

first of all there are a bunch of people who continue to challenge the idea that crowdfunding is an investment. this could not be further from the truth and perhaps this is the best place to start to weed out platforms that call themselves crowdfunding sites. crowdfunding falls into these categories

* donations
* memberships
* pre-ordering of a product

none of these applications gives the person involved any notion of potential upside, long term growth, or ownership in the corporation that is selling the product. think of it this way – a company has a widget that they need to manufacture and the company that tools it up and makes the product needs a minimum order to put the process in play. the business owner goes out and sells pre-orders of the product and while this happens, a third party trust holds all the money until the minimum is met, at which time funds are released and the widgets are made and delivered and the business owner is now off and running and the crowd that bought the product also becomes in some ways part of his marketing platform as they took part in the process of getting it launched.
in the case of our site (full disclosure here) at www.biracy.com we sell both a product and a membership that also entitles our members to participate in the film through crowdsourcing models which is also a unique part of our process but not really relevant to this discussion.

the lawyers

we think they should focus on finding and shutting down groups that “claim” they are crowdfunding but in fact are merely using this moniker as a way to solicit money from people, thus creating havoc and trust issues with legitimate groups working in the space.

registration of with the SEC

this is ridiculous. here’s why. in a hypothetical case if we were to required to register with the sec, then every member would then need to get a 500 dollar opinion on whether or not they should buy a copy of our DVD. why…because the buyer does need to understand what they are buying. that’s like saying that you need to consult a lawyer before buying a membership to costco or having an opinion provided to you before ordering your christmas baking that makes a donation to little league 3 months prior to delivery. In fact…our membership price is half the amount that i paid for cookies this year through and guess what…they were late! boo hoo. its not like i’m taking the cookies holding them in a jar for a year and then hoping the cookie market is going to climb so i can create an exit strategy and sell my cookies on ebay to some cookie sucker. i’m going to eat them. i purchased the product and consumed it, and somewhere in the process some people benefited…its just business.

how crowdfunding fits into the financial cycle

it fits into all the catergories that greg has mentioned from people like indiegogo providing a development platform for writer/directors, to people like us who are funding a 15M dollar feature film. the point to crowdfunding is that it removes the financial control from people who like to watch creative people squirm, and this is what’s really scary to the finance world.

where it does not fit

i think crowdfunding does have its limitations as well. i think complex start ups that can’t prove they can provide a finished product should, and will have to stay out of this area for now. An example might be that a biotech firm creating a new drug or product would not be able provide a guarantee of a finished product within a reasonable time period. i think as a result of this they would be ineligible for this process.

Oh, we read, Mr Troll. We read and we laugh and we poke holes in your arguments that you try to ignore or put your finger in to keep the dike from breaking, but you can't keep up. That is the hilarity of it all. Please, stop trying to make everyone else look like they don't get it. They do. You just need to start responding to the questions and points made in a reasonable manner. We won't hold our breath for it, though.

Crowdfunding a viable option for projects the fans want

It's sad that someone who has proven themselves over and over like Kevin Smith still has trouble proving his worthiness to the traditional establishment that finances films...

However, it is fantastic that we live in a day and age where crowdfunding by fans is a reasonable possibility. So far the most that has been raised for a feature film is under $2 million, and usually is in the microbudget area - Kevin Smith is obviously capable of pulling off a good cult film on a tiny budget.

For those who are interested, there are a number of indie filmmakers who have used some form of crowdfunding (I do use the term more liberally than David Geertz of Biracy, to include those that have investment from a crowd, not just donations), such as The Age of Stupid, The Cosmonaut, Putty Hill...

I write a blog that case studies filmmakers doing this sort of thing, so drop by if you're a filmmaker looking for tips on how to fund, promote, distribute, or monetise your content outside of the traditional route.